Chapter 6

xunitude's version from 2015-04-27 03:22

Section 1


Question Answer
Who allows companies to down space?EUB
For what reason will approval be given to downspace, a gas well ____ , an oil well _____Gas: low pressure, oil: heavy oil
Target areas are defined to prevent one company from draining reserves from another companies spacing unit
Off target wells are subject to __________ in the form of ____________a penalty; reduced production
“lands we own” means P&NG rights we lease
Do most oil companies own their mineral rightsno
Do most oil companies lease their mineral rightsyes
primary term and What is the primary term for a crown leaseamount of time granted in which to get wells drilled; 5 years

Section 2

Question Answer
How can a lease be continued and what will be continuedlease can only be continued if it contains a well that is capable of production. Only the productive spacing unit to the deepest productive zone will be continued
What government regulation governs the formations in a continuanceDRR, deep rights reversion
Split rights are ___________ and develop due to ______________where the mineral rights are split between one or more companies and the crown; DRR
Who makes a posting requestthe industry
Is the company who made the posting revealed to the public?No, the posting company is always confidential
What is a parcelgrouping of lands requested by an oil company
Are lands included that were not requested by industry (in Alberta)?No, only industry requested postings
Why make a posting requestIf you want to acquire a lease for the P&NG rights you must post the lands
Can other companies buy the lands you posted?Yes, anyone can bid
What is the posting request composed of?the lands and rights requested
What is the minimum size of a posting request?spacing unit
Who is responsible for determining if any special requirements will be tied to the surface use over the P&NG rights?crown will flag the posting as having some special consideration but it is the responsibility of the bidding company to clarify the special requirements
Who is responsible for determining the exact rights that are offered in a land sale notice?bidding company is responsible to be sure of exactly which zones are offered in the sale
Who wins the parcelhighest bidder

Section 3


Question Answer
continuance will be granted at the end of the primary term of a lease ifa well drilled is capable of production
What will be continued from the original leaseproductive spacing unit to the deepest productive zone
On offset requirement will only occur whenproductive well on a freehold lease adjacent to a crown lease that is being held by an oil company
Crown demands a ___________ with an offset noticeCompensatory royalty
major advantage of acquiring freehold mineral rightsConfidentiality
what is negotiable in a freehold mineral rights proposal? Who negotiates the details?Cash consideration, primary term, drilling obligation, and royalty; mineral rights owner and landman
Can an oil company force the freehold to lease the rightsNo, the freehold owner doesn't have to grant the oil company a lease
JV; what is it and why it might occurjoint venture; the partnership of 2+ companies to acquire land/drill wells. It allows the oil companies to expose less capital per project
AMI and what is it?Area of mutual interest; area of land agreed upon by companies participating in the agreement.
Name a very common deal made between oil companies. Why do they enter into this deal? Can either party refuse the deal?Farmin/farmout; company interested in exploring lands that are held by another company; Yes can be refused, they cannot be forced to work together
BPO; APO; define payoutBefore Payout; After Payout; production has been sufficient to pay for the capital costs of the drilling

Recent badges